Geotechnical Information Practices in Design-Build Projects (2012)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

3 that the design-builder will be able to reduce its contingen- cies and submit a competitive price proposal (Christiansen and Meeker 2002). Providing this information will also give the DOT a better sense of its program and expected costs. However, because the DB delivery process has proven to be an effective means of compressing project delivery periods to their shortest states (FHWA 2006), the DOT frequently has an incentive to start the procurement process before a robust geotechnical program has been performed (Higbee 2004; Kim et al. 2009). All of this creates some potential risks to both parties that are not present in a DBB delivery process (WSDOT 2004). This synthesis will look at how state DOTs and other transportation agencies have dealt with the geotechnical conundrum described above and furnish information on commonly used practices for managing geotechnical risks in DB project. SYNTHESIS OBJECTIVE The objective of this synthesis is to identify and synthesize current effective practices that comprise the state of the practice on geotechnical engineering and constructability for DB highway projects, including bridges, other structures, embankments, and excavations. This report will help state DOTs develop effective procedures for delivering DB proj- ects and managing geotechnical risks. In addition to a rigorous literature review, the synthe- sis is based on new data from a survey, a set of structured interviews, four case studies, and content analyses of DB solicitation documents [requests for qualifications (RFQs) and requests for proposals (RFPs)] and policy documents/ guidelines. A general survey on DB geotechnical practices yielded responses from 42 U.S. state DOTs. The content analysis included 46 DB solicitation documents from 26 U.S. states and DB policy documents/guidelines from 12 state DOTs and five federal agencies. Four case studies from different states also furnished specific information on differ- ent approaches to dealing with geotechnical requirements in DB projects. Two of the case studies examine completed DB projects to analyze the success or failure of the approaches used; the other two examine ongoing projects that are using innovative approaches that may complement the informa- CHAPTER ONE INTRODUCTION The current ASCE Report Card on America’s Infrastructure (ASCE 2010) rates the nation’s highways as D− and bridges as C. This is just one of many reports that have documented the “urgent need to replace aging infrastructure” (Dowall and Whittington 2003). Design-build (DB) project delivery has proven to be one method to accelerate the construction, reconstruction, and rehabilitation of aging, structurally defi- cient infrastructure because it allows construction to begin before the design is 100% complete (FHWA 2006). DB also allows the department of transportation (DOT) to shift some of the responsibility for completing the geotechnical inves- tigations necessary to support the geotechnical design to the design-builder after the award of the DB contract. This cre- ates a different risk profile than when the project owner has full responsibility for design (and hence geotechnical inves- tigations) in a traditional design-bid-build (DBB) project. FHWA mandates the use of a differing site conditions (DSC) clause for DBB projects on federal-aid highway proj- ects, unless the use of such a clause is contrary to state law (23 CFR 635.109). The DSC clause provides broad relief to a contractor for physical conditions that materially dif- fer from those anticipated by the contract. FHWA does not, however, have the same mandate for DB projects. Instead, it encourages state DOTs to use this clause when appropri- ate for the risk and responsibilities that are shared with the design-builder. On DBB projects, the risk of differing site conditions is almost always the responsibility of the owner (Tufenkjian 2007). Although this approach is largely the result of the DSC clause, it also results from the concept that prevailing case law and sound contract management principles require the owner to disclose to bidders virtually all geotechnical information in its control. On DB projects, the risk of differing site conditions is not as clear (Clark and Borst 2002). The DB contract can be awarded before either the owner or the design-builder makes a full geotechnical site investigation (Smith 2001). This leads to a question of how to identify an appropriate baseline for the DSC clause, if one is included in the contract (Hatem 2011). The DOT must also consider the policy question of how much information it should furnish about the geotech- nical site conditions (Blanchard 2007; Dwyre et al. 2010). The more information that is provided, the more likely it is

4 some experience using DB in their transportation projects (FHWA 2006). With the EDC program in action, one might expect to see more DOTs taking the plunge and selecting DB for critical projects. California and Vermont, for instance, adopted DB project delivery for the first time in 2010 (Cal- trans 2010; VTrans 2010a). In traditional DBB construction projects, the design and construction are performed under two separate contracts. In many cases, the DOT performs the design itself and then advertises for construction contractors to bid on the finished design. In DB, one entity is responsible for both design and construction; as a result the DOT has less direct control over the day-to-day details of design development, as both design and construction will have fixed obligations to meet a sched- ule and a price. Agencies that are new to DB fear that this loss of control will degrade the quality of the project (Ernzen and Feeney 2002). The Florida DOT led the nation in implementing DB project delivery. By 2002, it had awarded 49 DB projects for nearly $500 million worth of work and estimated that DB cut the traditional project delivery period by 30% (Peters 2003). The success of Florida DOT and the rest of the SEP-14 DB projects confirms that DB accrues tangible benefits to the DOTs that implement it. FHWA articulates the motivation for implementing DB when it states, “The greatest motiva- tion and realized benefit to a contracting agency of using design-build … is the ability to reduce the overall duration of the project development process by eliminating a second procurement process for the construction contract, reducing the potential for design errors and omissions, and allowing for more concurrent processing of design and construction activities...” (FHWA 2006, italics added). The recent emphasis on speedy project delivery creates an environment where public engineers may adjust their focus from the project’s technical requirements to expediting the procurement process. This includes evaluating the extent of the geotechnical engineering that the design-builder should perform after contract award. This geotechnical decision has a number of ramifications, including the level of liability for the underground conditions, which can be transferred along with the geotechnical investigation and design responsibil- ity. This creates a situation where the primary risks to man- age are post-award changes caused by design errors in the DB RFP and differing geotechnical site conditions. A study of the causes of construction claims in DBB projects found that design errors accounted for 39% of the claims and differing site conditions made up another 15% (Diekmann and Nelson 1985). A more recent study found that 75% of DBB project change orders were the result of design errors or omissions, as opposed to 29% of DB proj- ect change orders. It also found that 25% and 21% of DBB and DB changes, respectively, were caused by differing site tion gleaned from the survey and the solicitation document content analysis. BACKGROUND Many studies on the deteriorating condition of the nation’s highway network conclude that public transportation agen- cies must find ways to deliver infrastructure projects “better, faster, cheaper” (Atzei et al. 1999; Avant 1999; Richmond et al. 2006). The FHWA’s Special Experimental Projects No. 14—Alternative Contracting (SEP-14) was introduced in 1990, and by 2009 had authorized more than 400 DB high- way projects (FHWA 2006, 2009). In June 2010, FHWA introduced its “Every Day Counts” (EDC) initiative to address this and other issues of similar import. The program is designed to accelerate the implementation of immediately available innovative practices, as described by the current FHWA Administrator, Victor Mendez. Our society and our industry face an unprecedented list of challenges. Because of our economy, we need to work more efficiently. The public wants greater accountability in how we spend their money. We need to find ways to make our roads safer. And we have an obligation to help preserve our planet for future generations. But it’s not enough to simply address those challenges. We need to do it with a new sense of urgency. It’s that quality— urgency—that I’ve tried to capture in our initiative, “Every Day Counts” (Mendez 2010, italics added). Hence, the FHWA EDC focus is on innovations that have already been successfully employed by typical DOTs and are no longer considered “experimental,” as the SEP-14 label implies. “EDC is designed to identify and deploy innovation aimed at shortening project delivery, enhancing the safety of our roadways, and protecting the environment… it’s impera- tive we pursue better, faster, and smarter ways of doing busi- ness” (Mendez 2010, emphasis added). It is worth noting that Director Mendez changed the “better, faster, cheaper” man- tra to “better, faster and smarter.” This reduces the pressure on agencies because they no longer must use the cheapest solution to obtain federal-aid funding. The EDC program identified DB project delivery as one of its potential tools to achieve its aims (Mendez 2010). The EDC program states, “In addition to the time savings, a DB contract provides savings in cost and improvement in quality” (Mendez 2010). The advent of this federal program demonstrates increasing encouragement from the federal level for state DOTs to use this project delivery method. Suc- cessfully managing the geotechnical risk in a DB project is imperative to achieving the requisite level of quality in the finished product. The quality of transportation projects affects nearly every citizen in the United States on a daily basis. DB use has been advancing rapidly, and at this time more than 25 states have

5 conditions (Perkins 2009). Therefore, Perkins’ study agrees with the previously cited 2006 FHWA study finding that using DB project delivery appears to reduce the owner’s liability for design errors. As a consequence, explicitly distributing the risk of changed geotechnical conditions in DB projects is impor- tant. An FHWA technical manual on tunnel design and construction (Hung et al. 2009) outlines the essential infor- mation that should be contained in a typical contract with important geotechnical considerations, and recommends contractual mechanisms to coordinate the various aspects of geotechnical risk management, as follows: • “Thorough geotechnical site investigations; • Full disclosure of available geotechnical information to bidding contractors; • Preparation of a Geotechnical Data Report (GDR) to present all the factual data for a project; • Preparation of Geotechnical Design Memorandum (GDM) to present an interpretation of the available geotechnical information, document the assumptions and procedures used to develop the design, and facili- tate communication within the design team during development of the design. GDMs are not intended to be incorporated into the Contract Documents and are subsequently superseded by the Geotechnical Baseline Report (GBR); • Preparation of a Geotechnical Baseline Report (GBR) to define the baseline conditions on which contractors will base their bids and select their means, methods and equipment, and that will be used as a basis for determining the merits of contractor claims of differ- ing site conditions during construction; • Making the GDR and GBR contractually binding documents by incorporating them within the contract documents for the project, with the GBR taking prece- dence in the event of a conflict; • Carefully coordinating the provisions of the contract specifications and drawings with the information pre- sented in the GBR; • Including a DSC clause that allows the contractor to seek compensation when ground conditions vary from those defined in the GBR, and that result in a corre- sponding increase in construction cost and/or delay in the construction schedule; • Establishing a dispute resolution process to quickly and equitably resolve disagreements (particularly geo- technical problems) that may arise during construction without reverting to costly litigation procedures; and • Providing escrow of bid documents” (Hung et al. 2009). The specific use of the terms GDR and GBR is the key to effective implementation of these provisions. Thus, the next section furnishes detailed definitions that will be used in the synthesis report for these and other important technical terms. KEY DEFINITIONS The report uses a number of geotechnical terms in a precise sense. It is important for the reader to understand the specific definition of each term in order to gain a full understanding of this study. Differing usage of technology terminology in industry and public agencies continues to create unneces- sary confusion and faulty interpretation of solicitation docu- ments and contract specifications (Scott et al. 2006). Geotechnical Terms The definitions for the primary geotechnical reports refer- enced in the synthesis are drawn from the FHWA Techni- cal Manual for Design and Construction of Road Tunnels – Civil Elements, which draws them in turn from an ASCE document that reports a consensus definition reached by the Underground Technical Research Council (Essex 2007). • Geotechnical Design Memoranda (GDM): “interpre- tive reports are used to evaluate design alternatives, assess the impact of construction on adjacent struc- tures and facilities, focus on individual elements of the project, and discuss construction issues… the GDM may be prepared at different stages of a project, and therefore may not accurately reflect the final design or final contract documents. Since GDMs are used inter- nally within the design team and with the owner as part of the project development effort, it is not appropriate to include GDMs as part of the contract documents.” • Geotechnical Data Report (GDR): “a document that presents the factual subsurface data for the project without including an interpretation of these data. The purpose of the GDR is to compile all factual geo- logical, geotechnical, groundwater, and other data obtained from the geotechnical investigations for use by the various participants in the project, including the owner, designers, contractors and third parties that may be impacted by the project. It serves as a single and comprehensive source of geotechnical information obtained for the project. The GDR should contain the following information (Essex 2007): – Descriptions of the geologic setting – Descriptions of the site exploration program(s) – Logs of all borings, trenches, and other site investigations – Descriptions/discussions of all field and laboratory test programs – Results of all field and laboratory testing” (Hung et al. 2009). • Geotechnical Baseline Report (GBR): a document developed “to define the baseline conditions on which contractors will base their bids and select their means, methods and equipment, and that will be used as a basis for determining the merits of contractor claims of differing site conditions during construction” (Hung et

6 al. 2009). The GBR should contain the following infor- mation (Essex 2007): – “The amounts and distribution of different materi- als along the selected alignment; – Description, strength, compressibility, grain size, and permeability of the existing materials; – Description, strength and permeability of the ground mass as a whole; – Groundwater levels and expected groundwater con- ditions, including baseline estimates of inflows and pumping rates; – Anticipated ground behavior, and the influence of groundwater, with regard to methods of excavation and installation of ground support; – Construction impacts on adjacent facilities; and – Potential geotechnical and man-made sources of potential difficulty or hazard that could impact construction, including the presence of faults, gas, boulders, solution cavities, existing foundation piles, and the like” (Hung et al. 2009). In addition to these terms, the DOT survey used the following terms to describe commonly practiced methods furnished by the synthesis oversight panel for conveying geotechnical information in DB RFPs: • Reconnaissance Report: A document that contains the results of a review of records and observations from the project site. • Geotechnical Summary Report: A document that con- tains the results of a review of records and geotechnical investigation of critical areas • Preliminary Geotechnical Data Report: A document that contains the results of a partial geotechnical inves- tigation that will eventually be included in a final GDR. Other Relevant Terms Because this report addresses the application of geotechnical information in a DB contract, it is also important to define the following standard terms that relate to DB project delivery: • Design-bid-build (DBB): The “traditional” project delivery approach where the owner commissions a designer to prepare drawings and specifications under a design services contract, and separately contracts for construction, by engaging a contractor through com- petitive bidding or negotiation (DBIA 2009). • Design-build (DB): The system of contracting under which one entity performs both architecture/engineer- ing and construction under a single contract with the owner (DBIA 2009). • Alternative technical concepts (ATC): A procedure where the design-builders are asked to furnish alternative design solutions for features of work designated by the agency in its DB Request for Proposals (RFP) (Mn/DOT 2003). • Differing Site Conditions (DSC) Clause: A contract clause designed to give a contractor cost and time relief for (1) subsurface or latent physical conditions encountered at the site differing materially from those indicated in the contract; or (2) unknown physical conditions at the site of an unusual nature, differing materially from those ordinarily encountered and gen- erally recognized as inherent in the work provided for in the contract (23 CFR 635.109). There are two kinds, Type 1 and Type 2, which are defined in chapter two (Loulakis et al. 1995). RESEARCH APPROACH The approach to the synthesis relied on three independent sources of information. The first was a comprehensive review of the literature. An effort was made to seek not only the most current information but also historical information so that any changes in DB geotechnical practices could be mapped and related to the current state of the practice. The second line of information came from the general survey responses of state DOTs (42 states; response rate = 84%). The survey was based on the output of the literature review. The content analysis of DB solicitation documents from 26 states and DB policy documents/guidelines from 12 state DOTs and five federal agencies constituted the third source of information. Finally, short interviews with 11 design- builders were conducted to gain the contractor’s perspective on the topic. Subjects where two or more of the three lines intersected were considered significant and used to develop the conclusions and candidates for the list of effective prac- tices. Points where only one source furnished substantive information on DB project success were used to identify gaps in the body of knowledge that showed potential for future research. Protocol to Develop Conclusions and Suggestions for Future Research The major factor in developing a conclusion was the inter- section of trends found in two or more research instruments. The intersection of more than two lines of converging infor- mation adds authority to the given conclusion. Additionally, greater authority was ascribed to information developed from the general survey of highway agencies. The literature review and specification content analysis were considered to be supporting lines of information. Finally, the case studies were used to validate the conclusion as appropriate because they were examples of how U.S. highway agencies have implemented DB contracting procedures to support their projects’ geotechnical requirements. Suggestions for future research were developed based on the effective practices described in the literature and con- firmed as effective by one of the research instruments but

7 generally not widely used. Gaps in the body of knowledge found in this study were also used to define the areas where more research would be valuable. ORGANIZATION OF THE REPORT The next chapter details the legal and contractual principles of differing site conditions. The major geotechnical issue in DB projects is dealing with subsurface uncertainty before contract award. Therefore, chapter two contains information to provide the reader a foundation upon which to understand chapters three through six. Chapter seven presents four geotechnical engineering case studies that demonstrate the methods that agencies used to deal with uncertainty in their DB projects.